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Sunday, May 15, 2011

Weekend Op-Ed Piece

As TSB bloggers attempt to legitimize, question, and expose POD's, the debate rages regarding the legality or illegality of this business model. Proponents of PODS that have sought a legal opinion argue that the law and free markets substantiate the pursuit of this model, while those that dissent argue that not only is this illegal, it is a blatant attack on the industry, and your ability to earn a livelihood. Regardless whether you agree with POD's or are adversarial, eventually, the validity of POD's will be tested in a court of law. What does not bode well for POD's is that this is no longer a local, or regional business model, this business model is becoming viral, and as it picks up momentum, the national press, OIG and DOJ is paying close attention to how business is done in the spine industry. The battle lines have been drawn.

If one looks at the evolution of the industry, there were many surgeon champions that had been the impetus for today's emerging technologies that have enhanced the publics quality of life. These individuals were pioneers, scientists, and artists. Somewhere around the mid nineties, things began to change. It was a changing of the guard. It was a generational change. Surgeon no longer viewed themselves as clinicians, they wanted more, they began viewing themselves as entrepreneurs. Surgeons were beginning to question why there wasn't additional financial incentives in their collaboration with corporations. Of course, corporate America obliged. Sofamor Danek, DePuy/Acromed, Synthes, Stryker/Osteonics, Biomet, Smith and Nephew/Richards, and Howmedica. These companies were the breeding ground for the evolutionary change that has transpired. They all had their own footprint as to how business would be conducted. Let's help surgeons market their practice, let's provide them with educational grants, let's hire them as an educational instructor. Inducements whether one acknowledges it or not. Welcome consulting hysteria. Overnight, TSB remembers sales people and distributors changing their sales tactic. No longer were you selling on features and benefits, you began selling on futures, and surgeons loved it. Royalties existed, and rightfully so, but were never used as a means to an end as it was made famous by Blackstone and by today's denizens. How many of you heard this famous line, "Doc, if you use our product for 30-60 days and are happy with it, we will tender you a consulting agreement." How many surgeons business was bought by feedback on a screw or instrument modification? A by product of this behavior are the convoluted relationships that make this industry a breeding ground for greed. And unlike Gordon Gekko, or Mad Money Cramer, greed is not so good. It breeds contempt for rules, and the laws of nature.

Those advocating the legitimacy of POD's argue from a Darwinian point of view, believing that this is laissez-faire capitalism at its best, where all parties are free from state or federal intervention, restrictions, regulations, and enforcement. It can also be a Machiavellian philosophy where the ends (profits) justify the means (PODS), even though TSB must question whether some of these people even know who Machiavelli was? In defense of those individuals involved in POD's, they really don't worry about what is right or wrong, all they worry about is whether they are profitable. A sociopathic behavior? TSB will leave it to the masses to be the judge. Winning at any cost can, and most of the time, does come back and bite you in the arse, just ask Charlie Sheen.

So as sales people and surgeons battle amongst themselves, the powers to be, corporations, its executives, hospitals, hospital administrators, Wall Street and most of all the insurance industry are laughing all the way to the bank. Suckers! As you fight amongst yourselves, you perpetuate and condone the aberrant behavior and greed that the aforementioned parties exhibit. That is where the real power lies. It's not free markets economics that drives a POD, it's an inherent arrogance that makes someone believe that they can do it better, that you can actually effect change. As the insurance industry barrels into its third straight year of record profits, as hospitals continue to prosper, as CEO's continue to manipulate markets, you are getting into a street fight amongst yourselves. As hospital admissions decrease, insurance premiums increase, and physician reimbursements continue to decrease. Some of these players are showing their ineptitude, their lack of fight, a lack of vision, blaming some sales rep for driving up the cost of healthcare. As Clara Peller once said, "where's the beef?" Whom do you think is paying for those $500 dollar bottles of wine that Lukianov drinks? Whom do you think is paying for the Cohiba's and Cristal that you smoke and drink at the Viscogliosi Brothers soirees? Whom do you think is paying for your lap dance? As a student of great civilization, one of TSB's favorite lines is, "Die religion....ist das opium des volkes." Unfortunately, greed is the religion, it comforts you, it gives you a higher purpose, it's like a drug that makes one feel good. So in closing remember what the great John and June Carter Cash sang;

We got married in a fever, hotter than a pepper sprout, We've been talkin' 'bout Jackson ever since the fire went out, we're going to Jackson, we're gonna dig around, we're going to Jackson, look out Jackson town.

So at the end of the day as the delivery of healthcare approaches 22-24% of the GDP, it will be interesting to see how the POD phenomenon plays out.

45 comments:

The NUVA and V Brother bashing is getting a little tired. Looking at threads over the last year and this seems to be a recurring theme.

You don't like them. We get it. But pawning yourself off some sort of forensic accountant further takes away from what little credibility this forum has left.

The "change" we've experienced over the last 5 and 10 years will continue into the future. We just need to deal with it and stop dragging people and companies through the mud with pathetic rumors. Unless you have significant scale, generic plate and screw companies will slowly die off. The companies that make spine surgery "better outcomes, safer, less trauma, better economics" will thrive and that requires $$ and talent ... and guess where will the talented people go?

Interesting that this board has spent little time on perhaps the dirtiest segment of spine ... bone growth stimulators.

you're right about that 9:44AM--BGS business is filthy!! And talk about monopoly! The Big 3 have controlled this market by preventing downclassification to Class II--that's right --BGS are Class III! RS Medical tried to petition for downclassification a couple of years ago but were met with heavy opposition led by the Big 3 and their lawyers. And why? Have you seen the reimbursement on these devices? And this is an area where physicians have been playing for years--either through deals with their local reps or by deals with mfr's to allow them to do the 3rd party billing themselves.

9:44 and 10:03, you are showing your intellect if you really think bgs should be a class II device. There is a reason they are not class II devices and I really doubt its because of the lawyers of the big 3. Can you imagine if they did switch it to a class II device, you would have yahoos scrambling to get theirs approved just like the spinal implants. Well, there is a big difference in electrical currents and titanium screws, but of course im sure you know all about it and of course it should be a class II device and someone is getting paid under the table, lets just disregard the fact that electrical currents are no biggie and if it shocks a patient to death, no biggie. And we wonder why the spinal industry is becoming a mockery, its bc of people like 9:44 and 10:03 that act like they are experts. These are the same guys that are complaining about POD's, well if you actually bult a true relationship with your docs instead of running around sets in scrubs all day then maybe you wouldnt have lost the business.

If POD's are their ilk take off good reps will still be needed , just not 8 middlemen who do nothing but take commissions that should go to a rep.Look for an increase in your salry or commission rate as a employee of a POD is my guess.Doc

Why are we still talking about POD's? Oh, I know why... Because some reps want a sense of security. Maybe if we talk about POD's enough and I read enough POD bashing that I'll feel better knowing their time may be coming to an end. How about talking about other questionable "grey" areas like consulting agreements, buying lunches for the office staff when only the Dr. attends the meeting.... Or maybe the donuts you drop off in the morning. All of which are very questionable. Is Globus going public?

I don’t know which is more pathetic, this topic of POD's or the ones who are wasting their time posting about it.

For all you sitting at home in your pajamas winning on this page as to what "POD's" have done to your business and that you can't compete, then do us all a favor and QUIT and get out of the industry!! Otherwise, grow some hair on your peaches and do something about it! Instead of posting on this Blog, why don't you "google" the topic preceded or followed by typing in OIG, there is plenty of information for you to compile. Hell, I will even give you some links on the topic:

I am sure that every CEO, CFO, Compliance Manager of each hospital and their retained Council in your territory would be grateful to receive a hard and electronic copy of this information. Don't assume they know what is going on, some of them REALLY don't and here's a little tip, once they receive it and it is on record, they can't claim ignorance, they MUST at least research it. If they research it, they won't allow it as evidence from one hospital chain that did just that, threw the POD out!! In addition, I am sure each of you have a fairly prominent plaintiff firm in your city that would like nothing more than to be educated as to which companys’ are selling to POD's and the hospital Executives that are allowing it at their facilities.

These device companies that are KNOWINGLY selling to POD's MUST be held accountable, it is nothing more than a circumvention scheme that is cheating all of us. After all, when you buy a firearm, depending on the state in which you live, you have a waiting period which includes a background check. Hmmm, I wonder why the manufactures don’t do their own series of “checks and balances” on who they are working with? So all you so-called Spinal Executives with the various companies (and you know who you are) that are reading this and selling to POD's, take a good look in the mirror, do you like what you see? If not, reach deep down and find that moral fiber that your father taught you about, remember……….. it’s not about what IS or IS NOT legal, it’s about doing what is RIGHT.

News flash Mr. “Spinal Implant Executive”, a) if POD's were an ethical business practice don't you think the "big 3" would have already done it and compressed the market and b) if POD's don't have access to the implants, they can't exist! So in other words, your actions or rather lack of, makes you a conspirator to the issue!!

Stop cheating the system by taking the easy road, do the right thing, sell on merit and service, you will sleep better at night!

I don’t know which is more pathetic, this topic of POD's or the ones who are wasting their time posting about it. For all you sitting at home in your pajamas winning on this page as to what "POD's" have done to your business and that you can't compete, then do us all a favor and QUIT and get out of the industry!! Otherwise, grow some hair on your peaches and do something about it! Instead of posting on this Blog, why don't you "google" the topic preceded or followed by typing in OIG, there is plenty of information for you to compile. Hell, I will even give you some links on the topic:

I am sure that every CEO, CFO, Compliance Manager of each hospital and their retained Council in your territory would be grateful to receive a hard and electronic copy of this information. Don't assume they know what is going on, some of them REALLY don't and here's a little tip, once they receive it and it is on record, they can't claim ignorance, they MUST at least research it. If they research it, they won't allow it as evidence from one hospital chain that did just that, threw the POD out!! In addition, I am sure each of you have a fairly prominent plaintiff firm in your city that would like nothing more than to be educated as to which companys’ are selling to POD's and the hospital Executives that are allowing it at their facilities. These device companies that are KNOWINGLY selling to POD's MUST be held accountable, it is nothing more than a circumvention scheme that is cheating all of us. After all, when you buy a firearm, depending on the state in which you live, you have a waiting period which includes a background check. Hmmm, I wonder why the manufactures don’t do their own series of “checks and balances” on who they are working with? So all you so-called Spinal Executives with the various companies (and you know who you are) that are reading this and selling to POD's, take a good look in the mirror, do you like what you see? If not, reach deep down and find that moral fiber that your father taught you about, remember……….. it’s not about what IS or IS NOT legal, it’s about doing what is RIGHT. News flash Mr. “Spinal Implant Executive”, a) if POD's were an ethical business practice don't you think the "big 3" would have already done it and compressed the market and b) if POD's don't have access to the implants, they can't exist! So in other words, your actions or rather lack of, makes you a conspirator to the issue!!

Stop cheating the system by taking the easy road, do the right thing, sell on merit and service, you will sleep better at night!

For all you sitting at home in your pajamas winning on this page as to what "POD's" have done to your business and that you can't compete, then do us all a favor and QUIT and get out of the industry!! Otherwise, grow some hair on your peaches and do something about it! Instead of posting on this Blog, why don't you "google" the topic preceded or followed by typing in OIG, there is plenty of information for you to compile. Hell, I will even give you some links on the topic:

I am sure that every CEO, CFO, Compliance Manager of each hospital and their retained Council in your territory would be grateful to receive a hard and electronic copy of this information. Don't assume they know what is going on, some of them REALLY don't and here's a little tip, once they receive it and it is on record, they can't claim ignorance, they MUST at least research it. If they research it, they won't allow it as evidence from one hospital chain that did just that, threw the POD out!! In addition, I am sure each of you have a fairly prominent plaintiff firm in your city that would like nothing more than to be educated as to which companys’ are selling to POD's and the hospital Executives that are allowing it at their facilities.

These device companies that are KNOWINGLY selling to POD's MUST be held accountable, it is nothing more than a circumvention scheme that is cheating all of us. After all, when you buy a firearm, depending on the state in which you live, you have a waiting period which includes a background check. Hmmm, I wonder why the manufactures don’t do their own series of “checks and balances” on who they are working with? So all you so-called Spinal Executives with the various companies (and you know who you are) that are reading this and selling to POD's, take a good look in the mirror, do you like what you see? If not, reach deep down and find that moral fiber that your father taught you about, remember……….. it’s not about what IS or IS NOT legal, it’s about doing what is RIGHT.

News flash Mr. “Spinal Implant Executive”, a) if POD's were an ethical business practice don't you think the "big 3" would have already done it and compressed the market and b) if POD's don't have access to the implants, they can't exist! So in other words, your actions or rather lack of, makes you a conspirator to the issue!!

Stop cheating the system by taking the easy road, do the right thing, sell on merit and service, you will sleep better at night!

Please no more pod talk. Let's talk about royalties, or new innovations, creative ways to overcome bullshitapproval committees, were all in this together..hows lateral faring out there, any new mis companies starting up that are worth checking out... whatever happened to k2m, ldr, spineology, lanx no thanks, how much do spine surgeries bill for, how much can a rep collect, any good rep stories about taking the plunge and starting their own distributorship, the good, the bad, the ugly, come on, lets step this up, this is like having bad sex reading these last couple depressing woe is me posts. the more you talk abou pods the more ideas you give people around you in your territory. let it go...pods arent going to be as game changing as some of you sleeze bags would hope. give it up, this isnt the gold rush, you aren't going to make good coin cooperating with pod's.

You knuckleheads that are bored with POD talk obviously have none in your area and have no clue as to the changes that will take place if they become the gold standard. I am perfectly happy talking about them as it allows me to understand better the models that are present around the country and what to look out for. It does not matter if you delivered your customers baby and were his best man at the wedding, if he gets involved with a POD and you work for another company you are screwed. Relationships are trumped by greed, if you have not come to realize this then I welcome you to step out from under the rock you live under and observe reality as you are wet behind the ears!

TSB... please carry on with the POD talk because if they transpire into what some fear they will, these other subjects will not matter.

Yes, nix the babble about PODs, it's something that may or may not happen in the future. Bigger issues to discuss is the growing security that prevents us from meeting with surgeons and discussing new product or trends in the industry. What about old school distributors that are still "buying" business with vacations, cash or blondes with double D knockers. Maybe the pressure the big companies are putting on hospitals with their own in-house contracts bundling their hardware with all other divisions, incentivizing 100% compliance with promise of a kickback? Premier and Novation contracts off the table all of the sudden? 6-8 years ago a few surgeon owned companies were gaining ground and we all thought that would be the new model. How many of those companies are still kicking? Sure somebody is still using Custom out there if they have ownership but can a company like that survive? And what about all of the press on other social networking sites discussing how fusions have gone down but decompressions are up with interspinous devices? I don't know what to believe these days. Last question since surgeons chime in occasionally. What makes a great rep since we're all overpaid? Maybe they should consider the knowledge, technology and character instead of the ability to give consulting agreements, tickets and bimbos as some are so skilled at.

TSB, there are a lot of people reading this blog who are on the technical/engineering/QA side of the industry and don't really care much about sales channel issues like PODs. How about talking about research or product or innovation for a change, or has that become irrelevant?

Who cares about globus and globus going public?! We all see the reps sleeze around for about a year and then the changing of the guard. Nothing innovative about their product and poor sales reps! Jack is sending out resumes while Jill is trying to sleep her way to making quota. Kinda hard to wipe off the kool-aid stain when these guys head into an interview. Can we quit the "When is Globus going public?" crap? It's not funny anymore, we get the point!

Dear 11:58,Globus is actually very funny, in a laughing-stock sort of way. From ripping off Synthes' products to cut-and-pasting Synthes' 510k's (all the way down to the typographical errors), to the bimbo parades (this includes the dudes). Let's not forget the 15 minute turnaround on surgeon instrument requests that are being used on patients even though clearly marked as "Prototype". What's it like to look in the mirror every day and know that you devote your professional life to a fraudulent company? Dirtbags.

Everytime an announcement is made about any company, good or bad, the popcorn gallery comes out bashing, these are the same guys that get left behind and never grow sales because they are too worried about what others are doing wrong instead of worrying about themselves. Good move Stryker, not as good as JnJ but its a start.

Good move Stryker?? It's called scraping the bottom of the barrel and shows how weak the biologics area is for products. Orthovita has made a profit.....wait for it......once.....not for a full year....but in one measly quarter....over 10 years....ha!

"TSB, there are a lot of people reading this blog who are on the technical/engineering/QA side of the industry and don't really care much about sales channel issues like PODs"

Sorry guys and girls, but these issues affect everyone majorly. Take your head out of the lab or pod or wherever your slide-rule is kept and gain a better understanding of the marketplace and the field. Then again, this is why you don't see engineers in the field too much, since there are only a handful that can interact in the outside world without embarrassing themselves

to 5/15 7:54pm "News flash Mr. “Spinal Implant Executive”, a) if POD's were an ethical business practice don't you think the "big 3" would have already done it and compressed the market"News Flash to you - Medtronic bidding on the Texas Back Inst POD? What now?

If 8:54am is correct, then it might be time for some sales rep to dust off their resumes, things are a changing. If POD's are actually saving the hospital and patients money then its going to be tough to argue against that, maybe thats why Medtronic is bidding.

Watch out MSD and Depuy - Stryker Spine is back and coming after you. Almost as impactful as when they purchased the ray cage. Too bad all the large distributors carry actifuse. Oh well..., another bad decision.

9:57 - all the large Stryker distributors USED TO carry Actifuse. But, Baxtar has cancelled all of those agreements (within the past 3 months). I'll bet all the Stryker distributors are jumping for joy after having Actifuse uncerimoniously pulled from them.

Any all of you Globus hopefuls waiting for that company to go public in hopes that you may experience some sort of windfall pay day are going to keep on waiting & waiting & waiting,,, & waiting.

"Your check is in the mail",, laughing

Good luck. Big paydays on stock options are a thing of the past in this industry. Nobody is willing to pay a significant premium for any other company,, especially one with the type of reputation & lack of innovation like Globus.

9:57, you are incorrect - most of Actifuse' remaining largest distributors are Stryker groups. This move by Stryker only makes Baxter's purchase of Actifuse all the more asinine. Baxter will have lost almost all of the revenues they purchased, by year's end, and they aren't going to recover them with their "milk-route" direct "sales force".

Good addition to the Stryker line with Orthovita. It will get their distributors in line with everyone selling their Biologics. As for the guys already handling Vitoss who work with Stryker they will lose some money no doubt. As far as PODs, they are here to stay and the big 3 will be involved in them at some point within the next 8-12 months. There is just no other way to go for them. TBI is only the beginning. They have had their way in the marketplace for so many years and they have held off doing PODs for as long as they could. If they do not act they will continue to lose significant market share.

After Stryker got scooped on Osteotech, they were scrambling to grab something. Orthovita has been struggling to get any traction anywhere. So I would have say that yes it is a good move but a desperate move too.

Stryker has screwed up so many ways. The botched purchase of Globus, yes they made an internal announcement, hahaha! The product launches that are late to market with hardly any sets. And let's face it, the stuff is not even that great. Remember the Thor anterior lumbar plate or the dynamic acf plate? Not even "me too" status. That's why I left them, complete cluster f&$k.

Let's hope this helps good ol' Stryker, but with the crew driving that boat, I'm not betting on them.